In this time of emerging market capital flight, governments may be tempted to defend their currencies. This is a mistake. Such a defense rarely works. As governments buy local currency and sell hard currency, foreign reserves are further depleted signaling weakness to speculators who are encouraged to further short the currency. This establishes a death

Economic growth in the developed markets appears to be in a general if tepid recovery. The US continues to exhibit steady recovery in economic growth supported by a robust housing recovery and manufacturing which has even now widened to a slightly healthier labor market. Tempering this is a falling participation rate, which is troubling since

The wall of refinancing in the developed markets presents a high risk to emerging market fixed income assets as they divert capital away from these markets.

A couple of thoughts on risk… In a portfolio consisting of assets of varying complexity, liquidity and aggregation structures (such as mutual funds, structured credit and structured products), the problem of risk measurement and management becomes a bit more complex.

Let us consider a model for philanthropic, development finance. An interesting model for development philanthropy is one which provides equity capital to target low income groups to finance and encourage enterprise .